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Normal period of limitation under Section 11A of CE Act and Section 73 of Finance Act, 1994 enhanced

By TIOL News Service

NEW DELHI, FEB 29, 2016: ONE of the important changes in the budget 2016 is the amendments proposed in Section 11A of the Central Excise Act, 1944 and Section 73 of the Finance Act, 1994. The normal period for issue of Show Cause Notices in cases where there is no suppression of facts etc, is proposed to be amended to substitute "one year" in Section 11A with "two years" and "eighteen months" in Section 73 of the Finance Act, 1994 with "thirty months".

In the last Central Excise Tariff Conference, the Vizag zone had suggested that the Board should consider proposing amendment in law to the effect that in case of audit the normal period of limitation would be much longer say three years or five years.

Board seems to have accepted this partially.


 RECENT DISCUSSION(S) POST YOUR COMMENTS
   
 
Sub: extension of time to issue tax demands

The aggressive extension of time to issue tax demands to three years effectively in Service tax and two years in Central Excise in ordinary cases is indeed a step back in time and is a backstab(as a writer put it in TIOL) to the ideal of not making taxation retrospective.The Govt cries hoarse against it but continues to flirt with retrospective taxation. With this taxpayer-unfriendly move, tax litigation would not be quelled but would climb steeply. Taxpayers would have to keep their fingers crossed for much longer now. Tax uncertainty is put at a premium.
The state vat systems are awash with the consequences of such longer ropes to the tax babus.Taxation has become just more intractable in India.

Dr. Ravindran Pranatharthy
Advocate

Posted by Ravindran Pranatharthy
 

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